Exhibit 6-2
Victor Company makes a single product.The company has monthly fixed costs totaling $200,000 and variable costs of $20 per unit.Each unit of product is sold for $35.Brevard expects to sell 25,000 units each month.
-Refer to Exhibit 6-2.What is the monthly operating profit?

Question

Quizplus · Accepted Answer

The total revenue from selling 25,000 units each month is:

Total revenue = 25,000 x $35 = $875,000

The total variable cost for producing 25,000 units is:

Total variable cost = 25,000 x $20 = $500,000

The monthly operating profit is calculated as:

Operating profit = Total revenue - Total variable cost - Monthly fixed cost
Operating profit = $875,000 - $500,000 - $200,000
Operating profit = $175,000

Therefore, the monthly operating profit is $175,000.

Exhibit 6-2 Victor Company Makes a Single Product.The Company Has Monthly Fixed